While transaction levels were subdued last year, confidence remains strong among buyers backing either end of the market - premium destination pubs on one side and value-led community locals on the other.
Fleurets director and head of national agency James Davies predicted this divide would become more pronounced during 2026.
He told The Morning Advertiser (The MA): “Premium operations including food led venues with accommodation see focused operators such as Heartwood Inns continuing to expand.
“These are generally larger venues in affluent locations, which undergo significant investment.
“At the opposite end, value-led operations that attract budget-conscious customers are also enjoying growth. This is achieved through competitive pricing, promotions, and reliable everyday appeal, helping them capture share in a cost-sensitive environment.”
Davies added deal activity within the market was muted in 2025, with just 13 larger transactions involving some 130 pubs, which is around 0.3% of the total number of pubs in the UK, excluding the Loungers sale of 280 sites.
However, that lull is unlikely to continue into this year he explained: “2026 is likely to see more M&A activity than last year, which will help stimulate the market across all operational types so should be a busy time for the pub sector.”
Clear positioning
Though increased activity will expose weaker outlets, Davies warned: “These trends will highlight under-invested sites lacking clear positioning, food offers, or community engagement.
“As such, they will struggle to provide any standout reason to visit, making them highly vulnerable to closure as overall industry consolidation favours well-capitalised, differentiated operators.”
Davies further projected community wet-led pubs would remain attractive to acquisitive operators, such as Punch, Amber Taverns, Red Oak and Valiant, which he predicted would continue to buy and refurbish pubs nationwide throughout the year.
Meanwhile, Savills director of licensed leisure, Sian Tunney, and head of department for licensed leisure, Kevin Marsh, told The MA the sector is adapting rather than retreating.
Despite economic pressure, the duo said operators are doubling down on “experience-led venues, premium food and drink offerings, and sustainability initiatives”, with footfall and spend data reinforcing the pub’s role as a key social space.
Though one of the biggest shifts is franchising. Tunney and Marsh explained the model gained momentum in 2025 and shows “no signs of slowing” in 2026, offering operators a way to scale while managing risk, and giving investors “brand security and predictable growth”.
Ownership structures are also shifting, the experts added, with operators increasingly turning to leaseholds in a bid to preserve flexibility, while pub companies are selling freeholds to unlock capital, improving market liquidity and widening access for investors.
From an investment standpoint, Savills said pubs continue to deliver “robust income returns, outperforming many traditional sectors” alongside strong demand for high-performing regional assets.
Alternative funding is also on the rise, including private equity, crowdfunding and joint ventures, as licensed leisure borrows models from other sectors to fund growth, according to the London-based estate agents.
Increasing polarisation
Despite operator resilience, the pub and restaurant market is facing increasing polarisation, Christie & Co managing director Stephen Owens told The MA.
He said demand was strongest for well-invested, profitable pubs with a ”clear offering, diversified income streams and strong local community support”, while under-invested sites face mounting pressure and accelerating estate churn.
Owens added buyer appetite for freehold pubs was strong, with “the vast majority of transactions continuing to be for ongoing pub use, rather than for alternative conversion”, pointing to sustained activity from private individuals and family operators as a sign of long-term confidence.
Cost pressures also continue to shape the market, Owens explained, with wages, energy prices and supply chain inflation squeezing margins and prompting reduced trading hours at some sites.
The managing director also described the Government’s 15% business rates discount from April, alongside a two-year freeze, as “a welcome intervention”, but stressed business rates remain a significant burden for operators and investors.
Meanwhile consumer spending remains selective, with value, quality and experience rewarding pubs that clearly justify their price point, Owens said, while those without a distinct identity fall behind.
For Owens, growth opportunities in 2026 lie with “premium destination pubs, community-led locals with strong food and drink offers, and venues that successfully blend hospitality with experience”, alongside acquisition and repositioning opportunities created by estate churn.
While the sector continues to face economic headwinds and tax hurdles, it seems the experts all agree 2026 will see the pubs that invest and stand out pulling ahead, leaving everyone else playing catch-up.
